Food start-up Petoo seeks to raise $5 mn, deliver evening munchies

Petoo, a Bengaluru-based smart restaurant start-up, plans to raise $5 million in Series A funding by end of this year. “There has been great in-bound interest from investors because of massive traction that we have shown in a few months time. We will be closing Series A round by end 2015,” informed Kumar Setu, Co-Founder. [caption id=“attachment_2450376” align=“alignleft” width=“380”]  (Left to right): Co-Founders Kumar Setu, Ritesh Dwivedy, Abhishek Mandal[/caption] The Bengaluru-based start-up launched in end-April by Ritesh Dwivedy, Kumar Setu – IIT Kharagpur batch mates and, Abhishek Mandal a chef-cum-alumni from IHM, is witnessing a slew of changes in October. The founders have brought in another IIT Kharagpur batchmate and IIM-K alumni Ravi Kumar, as head of delivery who will be overseeing operations across India. It also plans to double its staff strength from the current 30 (including delivery boys) to 60 in a month’s time. Petoo, which has delivering only meals so far, will start the launch of evening snacks which will delivered by mid October across all 25 locations in Bengaluru. The start-up that was launched by pooling in the trio’s saving of Rs 30 lakh, raised Rs 1.5 crore in seed funds before its launch. It uses big data analytics to predict consumer behaviour, reduce food wastage and speed up the home delivery time. The target customer is anyone who is on the look-out for premium Indian food with deep pockets, but has no time in hand. Business Model Petoo sells hyperlocal Indian cuisine and delivers it through its hub and spoke model distribution network so that food can reach customer in 10 minutes or less. Food gets prepared at the central kitchen so that quality, hygiene and consistency of taste can be maintained and then these are sealed in boxes to be dispatched to the delivery hubs. The last mile delivery is done by bike riders who pick up the food from the hub and deliver it to the customer. Setu says that the usage of Big Data has ‘hugely contributed’ into making the overall business efficient. “Our food wastage has come down from 20 percent to 7 percent, delivery time has come down from 45 minutes to 25 minutes, kitchen utilization has gone up by 40 percent,” he said. The company plans to use Big Data for many of its other functions shortly, which will help it to cut cost of acquisition, improve order value and increase repeat rates. ‘Own’ experience Outlining the start-up’s USP, Setu says, “We own the entire lifecycle – from food production to delivery and thus own the entire experience of the customer. We can decide which item to prepare, how well to prepare, how fast to deliver, how conveniently to package it and ultimately what kind of experience to deliver to customer. As we want to build a pan Indian brand in food and ultimately take it to global scale, we think it’s crucial to do that.” Since its launch, Petoo has had a number of requests for deserts. “Now that we more or less understand the operations side of it, we are working on a few desserts which will be rolled out for orders, soon,” said Setu. The future Petoo is looking at hitting a run rate of Rs 12 crore by next fiscal. The next step, after raising Series A, is to expand to other cities like Chennai, Hyderabad and NCR, said Setu.